CHARLOTTE AMALIE — The island-hopping affiliate of grounded regional airline Silver Airways has been auctioned off to an investment firm, a move that appears to ensure continued local air service for residents and visitors in St. Thomas and St. Croix.
Seaborne Virgin islands, currently a single seaplane operation, was sold in a Fort Lauderdale bankruptcy auction last week to Leonite Funds I LP of Wilmington, Del. The firm’s bid of $1.425 million narrowly topped an offer by Corporate Flight Management of Tennessee. The latter company, which was designated as a “backup bidder,” does business as Contour Airlines, operator of chartered and regularly scheduled flights serving various U.S. locations.
Newly court-appointed trustee Soneet Kapila conducted the auction shortly before the July 4 holiday. U.S. Bankruptcy Judge Peter Russin signed off on the sale order last Thursday, according to court records.
The sales deal, as outlined in court files, is intended to “preserve the operational continuity of the Business, maintain all existing Federal Aviation Administration and Department of Transportation certificates and authorizations without interruption, and ensure continued service to the communities served by Seller.”
Seaborne’s website is now touting “summer fare sales” with prices as low as $79 one way through Labor Day.
As for Silver, the wind-down of the company’s business affairs is in the hands of Kapila, a longtime professional trustee based in Fort Lauderdale.
Silver, which is based in Hollywood and once employed about 1,000 employees before filing for Chapter 11 protection last Dec. 30, permanently halted operations in early June amid a cash shortfall. Seaborne, which was acquired by Silver in 2018, also sought bankruptcy court relief at the end of December.
An original agreement to sell Silver, a regional carrier that once served multiple Florida cities, the Bahamas and various islands in the Caribbean Basin, became problematic for Argentum Acquisitions LLC, an affiliate of Wexford Capital of West Palm Beach, which intended to buy and operate Silver.
But the cash shortage at Silver prompted Argentum to retreat from the deal, although it ultimately bought the airline’s assets without agreeing to fund Silver’s operations.
A veteran trustee
The Silver sale briefly left Seaborne’s fate open to question, but the uncertainty appears to have been removed with last week’s auction.
The Seaborne sale occurred after Judge Russin, who had become dissatisfied with Silver’s management, appointed Kapila as Chapter 11 trustee following a search by the U.S. Trustee’s Office.
A bankruptcy trustee for more than 25 years, Kapila is “a sitting member on the Panel of U.S. Chapter 7 Bankruptcy Trustees and as a Chapter 11 and Subchapter V Trustee,” according to his website. He has also served as a chief restructuring officer, Securities and Exchange Commission corporate monitor, and as a liquidating trustee and receiver.
The Seaborne sale still leaves a number of Silver business affairs for Kapila to resolve this summer and possibly beyond. Various creditors including several hundred employees have outstanding claims.
Kapila did not immediately respond to an email seeking comment Monday.
By DAVID LYONS/Sun Sentinel
